The Jupiter Division of Space, Inc Assume That Jupiter Cannot Sell Any Additional Crystals Externally

question 82

Multiple Choice

The Jupiter Division of Space, Inc. produces dilithium crystals. One-third of its output is sold to the Antari Division, and the remainder is sold externally. Jupiter's estimated sales and cost data for the coming year are: $\begin{array}{lrr}&\text { Antari Division }&\text { External Sales }\\\text { Units } & 12,500 & 25,000 \\\text { Sales } & \$ 18,750 & \$ 50,000 \\\text { Variable costs } & 12,500 & 25,000 \\\text { Fixed costs } & 3,750 & 7,500\end{array}$ Assume that Jupiter cannot sell any additional crystals externally. If the Antari Division has an opportunity to buy from an outside supplier at $1.40 per crystal and Jupiter refuses to meet this price, the company as a whole will be:

• A) $1,250 better off
• B) $3,750 worse off
• C) $6,250 better off
• D) $5,000 worse off

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